DTN Closing Grain Comments

Grains Quietly Mixed Ahead of a Long Weekend

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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(DTN illustration by Nick Scalise)

General Comments:

May corn closed up 1/4 cent per bushel and December corn was down 1/2 cent. May soybeans closed up 1 1/2 cents and November soybeans were up 1 1/4 cents. July Kansas City wheat closed down 1/2 cent, July Chicago wheat was down 2 cents and July Minneapolis wheat was down 1 3/4 cents.

The June U.S. dollar index is trading up 0.477 at 97.135. The Dow Jones Industrial Average is up 134.89 points at 26,584.43. June gold is down $0.80 at $1,276.00, May silver is up $0.01 at $14.95 and May copper is down $0.0465 at $2.9210. May crude oil is up $0.15 at $63.91, May heating oil is up $0.0018, May RBOB is up $0.0292 and May natural gas is down $0.023.

For the week:

May corn closed down 2 1/2 cents and December 2019 corn was down 2 3/4 cents. May soybeans were down 14 3/4 cents while November 2019 soybeans were down 14 1/4 cents. July KC wheat was down 15 1/2 cents, July Chicago wheat was down 20 1/4 cents, and July Minneapolis wheat was down 6 3/4 cents.

Corn:

May corn ended up a quarter-cent Thursday, a quiet day of low-volume trading to end the week at $3.58 1/2, near its contract low. The U.S. weather map showed heavy rains and severe weather in the Southern Plains Wednesday evening into Thursday with moderate rain amounts reaching into the eastern Midwest. The same general area is expecting more rain early next week and the six- to 10-day forecast is for above-normal temperatures and precipitation for most of the U.S. As most know, a lot of planting can get done quickly whenever conditions allow, but for much of the northern Corn Belt, that time is still two weeks away or more, depending on how the weather pattern looks in early May. In the meantime, USDA anticipates a 600 million bushel (mb) increase in corn exports from Brazil and Argentina that typically start cutting into U.S. corn exports in July. Early Thursday, USDA said last week's export sales totaled 37.3 mb and shipments totaled 48.2 mb, enough to maintain hope that USDA's export estimate could be reached in 2018-19. Fundamentally, ending corn supplies have not shown much change in four years and prices should trade similar ranges. Technically, May corn is trading quietly near its contract low while cash corn prices chop sideways, above $3.30. DTN's National Corn Index closed at $3.37 Wednesday, 22 cents below the May contract and down from its February high of $3.52. In outside markets, the June U.S. dollar index is up 0.48 after the U.S. Commerce Department said retail sales were up 1.6% in March, more than expected. Other commodities were mixed and June hogs were up $0.62 after USDA reported China bought another 23,500 metric tons (mt) of U.S. pork last week.

Soybeans:

May soybeans ended up 1 1/2 cents at $8.80 1/2 on a quiet Thursday, not showing much action after falling to a new five-month low on Wednesday. For the week, the May contract lost 14 3/4 cents as bearish fundamental concerns appear to be outweighing any optimism that could potentially come from a new trade agreement with China. The latest news is that U.S. officials will be travelling back to Beijing the week of April 29 in hopes of securing an agreement sometime in May. Yes, we have heard these kinds of reports before, and it is not surprising that they are being ignored by the markets, but a real agreement would be helpful, especially if it were accompanied by near-term purchases. Without China, export numbers are a bearish topic in 2018-19. Earlier Thursday, USDA said there were 14.0 mb of sales and 17.3 mb of soybean shipments last week, well below the 34.6 mb of shipments needed each week to reach USDA's goal of 1.875 billion bushels (bb) of exports by the end of August. Aside from a possible trade agreement, the outlook for soybean prices remains bearish with record ending stocks of at least 895 mb anticipated for 2018-19, exports dragging and a possibility that plantings will be higher than USDA's early estimate of 84.6 million acres. Technically, the trend has turned lower for both, cash and futures prices. DTN's National Soybean Index closed at $7.96 Wednesday, a new four-month low and priced $0.83 below the May futures contract.

Wheat:

July KC wheat lost a half-cent to $4.25 3/4 Thursday, finishing the week down 15 1/2 cents as wheat prices continue to trade under substantial bearish pressure. Thursday's weekly export sales did not help the case for wheat prices either. Last week's wheat export sales totaled 11.7 mb and shipments of 18.4 mb were not close to the 31.7 mb needed each week to reach USDA's 945 mb export estimate by the end of May. The result is that the U.S. is likely to carry at least 1.1 bb of old-crop wheat into the new season on June 1. Heavy rain has been a frequent visitor to the Southern Plains lately, showing up again Wednesday evening and due to return early next week. The rains have created a lot of excess soil moisture for the SRW wheat crop, but overall good-to-excellent crop ratings remain high for winter wheat, at 60% USDA said. Outside the U.S., the western Canadian Prairies remain dry, but most other wheat regions appear mostly favorable, offering no significant production threat early in the new season. For now, the trends for all three cash wheat prices are down. DTN's National HRW index closed at $4.08 Wednesday, holding above its March low and down 13 cents from the May futures contract. DTN's National SRW index closed at $4.23 Thursday, also up from its low in March. U.S. futures markets are closed on Good Friday and resume trading at 7 p.m. CDT on Easter Sunday.

Todd Hultmancan be reached at todd.hultman@dtn.com

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Todd Hultman